Since Russia announced the veto of certain products from the U.S., the European Union, Australia, Norway and Canada, other countries have begun to reconfigure their exports in order to supply the Russian demand.
In the case of Chile, and its dried and dehydrated fruits industry, "the actual effects will depend mainly on the willingness to pay the current international prices for these products and the availability of stock we have right now," said Andres Rodriguez, representative of the Chilean Walnut Commission and Chile's Prunes Association.
Rodriguez said that Russia was the main market for the prunes, as it accounted for 15% of shipments.
"Russia is the largest market for Chilean prunes. In 2013, Chile exported 10,089 tons worth more than $ 24.4 million dollars to that market," he said.
"We can see that Chile is already a very strong exporter in the Russian market. Today, Russia imports around 28,000 tons, of which, historically, Chile and Argentina send about 20,000 tons (about 10,000 tons each) and the rest are sent by the U.S., Serbia and Moldova," he added.
However, Rodriguez said, Argentina's participation this year should be very low because their harvest was fairly low, so Russia's demand for the Chilean fruit could increase.
"In this scenario, we might think that Russia will increase their demand for Chilean prunes, but it is important to consider that we are in a year when international prices of plums are higher and that adds up to a period of devaluation of the Russian ruble, there will likely be a contraction in demand. "
Thus, Rodriguez said, "we must wait to see how the rest of the year unfolds, but exports should not be higher than in previous years since we have already seen a contraction, even for the imports of Chilean plums."
Regarding nuts, Rodriguez said that, currently, Chile wasn't one of Russia's main suppliers since they imported their nuts mainly from the Ukraine, as it was close to them and their prices were lower than that of most of the other producing countries.
"Ukraine accounts for about 90% of nut exports to the Russian market, which, on average, imports about 10,000 tons. Chile accounts for 4%, the U.S. for 1% and the rest comes from other countries in Eastern Europe," he stated.
"The conflict with Ukraine could potentially have a bigger impact on the Russia's demand for Chilean walnuts more than the veto on the U.S. and Europe. This impact will depend primarily on how Russia absorbs the current prices of Chilean nuts and the amount of product we have available at this point in the season," he said.
Rodriguez added that if the Russian sustained its veto over time, the conditions of the markets would change and Chile could start taking a leading role. In 2013 Chile exported 1,187 tons of shelled nuts to Russia, i.e. $8.6 million dollars.
Finally, Rodriguez said Chile provided a very small percentage of the almonds worldwide, but that there could be new opportunities generated by the ban.
"Even though the U.S is the leading supplier of almonds worldwide, even in Russia, Chile provides a very small share of the world production and has higher prices, but with an excellent quality," he said.
"Chile could cover a low volume of a possible increased demand from Russia, , but that could certainly generated niche opportunities in the Russian market," he said.
Source: Fresh Fruit Portal